Mid-week update

The Hill reports that the Senate will vote today on whether to end debate on Sylvia Burwell’s nomination to serve as HHS Secretary.

On Monday, at the annual Health Datapalooza HHS announced the internet release of 2012 hospital charge data. 

The data include information comparing the average charges for
services that may be provided in connection with the 100 most common
Medicare inpatient stays at over 3,000 hospitals in all 50 states and
Washington, D.C. Hospitals determine what they will charge for items and
services provided to patients and these “charges” are the amount the
hospital generally bills for those items or services. With two
years of data now available, researchers can begin to look at trends in
hospital charges. For example, average charges for medical back problems
increased nine percent from $23,000 to $25,000, but the total number of
discharges decreased by nearly 7,000 from 2011 to 2012.

Kaiser Health News offers a consumer perspective on the data release. A Fierce Health Finance editor, Ron Shrinkman, cogently observes that 

Hospitals have resisted price transparency in small and large ways. That makes sense, because being opaque about what you charge presents specific business advantages–such as the ability to charge whatever you want, particularly in the case of patients who lack insurance and have virtually no bargaining power.

As I noted a couple of weeks ago, price transparency is slowly taking place in the hospital sector. But reference pricing could become a threat to price opacity, and possibly the greatest threat to opacity of them all.

Speaking of costs, a Reuters article offered an FDA official’s informal perspectives on expensive specialty drugs.  Here the upshot which rings true with the FEHBlog:

By law, Dr. Richard Pazdur, the U.S. Food and Drug Administration’s cancer drug czar, is not allowed to consider the cost of treatments his agency reviews, only whether they are safe and effective.

But Pazdur is not blind to escalating drug prices and the growing debate over how to place an appropriate value on cancer drugs, which can cost $100,000 a year or more a year.

“It’s very difficult for me to talk about,” Pazdur said in an interview at the American Society of Clinical Oncology meeting in Chicago, where the issue of value has been a consistent theme among the world’s top cancer doctors.

Instead, he recounts a story about buying his first house in Detroit in 1982. “I was very nervous. I asked the realtor if I was paying the correct price. She said to me, ‘Rick, the price is what anybody is willing to pay for it.'” In his view, the same applies to cancer drugs.

“Everybody knows that these are expensive drugs,” he said. “Obviously, we can’t just continue going on with escalating prices of drugs. That’s not a regulatory decision or anything profound from the FDA. It’s just the reality of the situation.”

Pazdur said the solution will likely take “a national dialog” involving all stakeholder – insurers, patients, doctors, lawmakers.

An FDA regulatory pathway to biosimilar drugs also would help.